Exam 12: Aggregate Expenditure and Output in the Short Run

Inventories refer to

All of the following are one of the four main categories of spending identified by John Maynard Keynes except

Table 23-1 -Refer to Table 23-1.Using the table above,compute aggregate expenditure and identify the macroeconomic equilibrium.

The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net exports to ________ and real GDP to ________.

When aggregate expenditure = GDP,

The key idea of the aggregate expenditure model is that in any particular year,the level of GDP is determined mainly by

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

Figure 23-1 -Refer to Figure 23-1.According to the figure above,at what point is aggregate expenditure greater than GDP?

Disposable income is defined as

The formula for the multiplier is (1 - MPC).

Figure 23-3 -Refer to Figure 23-3.Suppose that government spending increases,shifting up the aggregate expenditure line.GDP increases from GDP₁ to GDP₂,and this amount is $400 billion.If the MPC is 0.75,then what is the distance between N and L or by how much did government spending change?

Macroeconomic equilibrium can occur at any point on the 45-degree line.

During a(n)________ many firms experience increased profits,which increases ________ and investment spending.

When aggregate expenditure is more than GDP,which of the following is true?

The five most important variables that determine the level of consumption are

A general formula for the multiplier is

Refer to Table 23-2.Given the consumption schedule in the table above,the marginal propensity to save is

If inventories decline by more than analysts predict they will decline,this implies that

Following three years of negative growth,restaurant sales in the United States were expected to increase 3.6 percent in 2011.If the increase in restaurant sales increases aggregate expenditure,

The aggregate demand curve illustrates the relationship between ________ and the ________,holding constant all other factors that affect aggregate expenditure.